Asa Dotzler: Firefox and more

As I see it, my "disposable" income, is all I have to offer any company trying to make money.

For me personally, lets say that number is $100/week.

I can spend that on Pizza, Beer, Lego, Gadgets, Clothes, or whatever.

Now, TV ads can try and entice me, as can local billboards, papers, flyers, or ads I see on the Internet.

I would say that 75% of my money, goes to stuff I already know and love. (e.g. a Quizno's sub when I've just ate my lunch from home) and 25% goes to "new" stuff I find interesting... oh, hey, I like that band/author/designer/technology/whatever I'll buy it!

Advertisers are hoping that their ads will sway me... some may work, some won't. (e.g. a Pepsi ad could offer me a chance to win a new car, but it won't work, because I prefer Coke)

As long as people have a "disposable" income, and corporations have a budget, there will always be ads, and companies trying to entice you. I don't see the online ads world changing much in the foreseeable future... only the targeting will be improved, so that I start getting ads more applicable to what I am looking to buy! (e.g. ads for yummy food, cool music, and tech gadgets may very well win me over... but ads for clothes, cars, housewares and other things I don't care about, are just a waste (for the advertisers))

The only "business model" I see failing, is the one that spammers use to pollute my inbox with ads for stuff I would never dream of buying. I'm sure the price is cheap to bulk spam people, but the targeting is horrible!

I have a great mortgage, a guy who manages my stock portfolio, my sex life is great thankyou very much, I'm not looking for instant weight loss, cheap illegal software, fake watches, multi-million dollar money laundering scams etc.

Great post by the way Asa, definately a good read.

thankx

You ask some very pointed questions about the economy of the Internet at its current and future states. However, given your assertion that people should not think of Mozilla/Firefox as relying on Google for revenue, but rather the more abstract and indirect Internet as a whole, I would like to bring your attention back to a small discussion we had a number of months ago:
http://weblogs.mozillazine.org/asa/archives/2007/08/top_addons.html

Given your claim that Firefox's core financial reliance isn't so much Google as it is search revenue as a whole, which is in turn dependent on the advertising model of the Internet as a whole, wouldn't it be hurting yourself to block ads by default in Firefox?

I think another thing is that Mozilla is one of the darlings of OSS, so whatever Mozilla does gets attention. So when Mozilla publishes it's financials, "OMG! They'r ein league with Google!" People love to see conspiracies. And they're focusing on how Mozilla gets the money rather than what Mozilla DOES with the money, which should be the important part. The parts I found most interesting were the low physical overhead, and concentration on people. This tells me Mozilla is doing what most dot-bombs didn't: realize that their people who build the technology are much more important than toys in the cafeteria.

Another thing I noticed was that you guys left out the secret bunker you're building in the desert.

I wouldn't fret too much that the contextual ad service is going to stop being profitable any time soon. Our City newspaper became free about a year ago, because it's now able to entirely sustain itself on ad revenue which is increased now because of its wider distribution due to being a free news paper. That's print media advertising revenue!!

Once advertising has started in a new media (print, radio, cinema, t.v etc..) it never really goes away, just the amount of money being input in to it fluctuates quite a bit. Now I can't comment for all forms of media and I certainly can't really comment on international T.V. But in England it appears to me that it very much that T.V had a long honeymoon period with advertising once it got introduced, (back when there were less than 6 channels on a standard T.V), advertisers saw it as the thing to do and there were very few channels that they could dump large sums of money in to (to start off with there was only 1). Nowadays with the huge increase of channels, the declines of T.V viewing as a whole and this new trendy 'contextual ad service' the amount of money being spent on the same channels that bloomed during the honeymoon period are now struggling to get money to produce shows on the budget that they were used to.

In a somewhat similar way, while contextual ads is more diverse, search ad revenue is streamed in its majority through very few services. While it's not quite like T.V, in that people can choose any search engine, it wouldn't surprise me if the people spending their money started to become more clever about where they spent it. The amount of money for any 1 service may decrease quite a bit, but the total amount of money spent in contextual advertising as a whole would probably be fairly stable.

Presumably this will give Mozilla a number of options as time moves on. Probably most severely limited by the fact it puts ends users first, so Mozilla will need to be creative and ingenious about how it tackles such a problem if it occurs, but then I think users will expect little else.

Clint, you said "wouldn't it be hurting yourself to block ads by default in Firefox?" I didn't say that Firefox should block ads by default. I said it should include an ad blocker so that users could block ads as they see fit. There was a time when the entire advertising industry online was dependent on "punch the monkey" banners and pop-ups. We started blocking that crap and a new ad medium took over, contextual, mostly text-based ads. Ad blockers aren't every going to destroy advertising but hopefully if they're used well, they'll push advertisers to create better, more acceptable, and even more profitable ads. If we're careful about the tools we provide and the default settings, we can bias the results towards a better web future for everyone, including the advertisers.

Damian, you said "I wouldn't fret too much that the contextual ad service is going to stop being profitable any time soon." Well, people were saying the same thing about pop-ups just 6 or 7 years ago.

- A

"Damian, you said 'I wouldn't fret too much that the contextual ad service is going to stop being profitable any time soon.' Well, people were saying the same thing about pop-ups just 6 or 7 years ago."

Yeah, but pop-ups were a pain in the &%#$. Contextual ads are actually useful. Whatever is the most useful will win - that's the way an ideally-functioning market works.

Couple things:

- Search was *always* in the browser it was just a matter of how it was surfaced.
- If 30% of web traffic goes through Firefox, Mozilla can make money however they want. We chose to take the bigger and easier money, frankly to jump on the 1.0 opportunity. There's other people's money and there's more money to be made.

The fact that Mozilla still only has one BD person (if that) speaks volumes to Mozilla's priorities of delivering good products.

You and Mozilla Corp don't need to defend yourselves on making money. It's called trying to live in the Bay Area.

"Damian, you said "I wouldn't fret too much that the contextual ad service is going to stop being profitable any time soon." Well, people were saying the same thing about pop-ups just 6 or 7 years ago."

I think that's a bit of a simplification of the situation :P. While I'd be willing to agree that the analogy holds merit in that they are both technical things as apposed to a whole "media", for example internet advertising certainly boomed over the last 7 years regardless of the decline of pop-ups, I'd not take it any further than that.

Simply put contextual ads are "moral". We put up with adverts on T.V because it's how companies fund production or buying of new shows without impeding the ability to watch it too much. We put up with adverts in newspapers because they allow us to read the the news, fund journalists and not get in the way of all that at the same time. In that sense contextual ads are the same, we can search for stuff and find highly relevant stuff, all for free without wading through pages trying to find the real results. Pop-ups did not follow this morale (or ethic), they were like spam calls which in my country we can put on a free block list with certain telephone companies, they just won't survive in any serious form compared to other advertising.

But it's certainly interesting points to think about. Making something free and sustainable, while relying on traditional capitalist values to do so certainly doesn't seem like an easy trick.

$66 million is a lot of money. I am sure there is something like this... but, create a Mozilla endowment for the future. 100 employees at $100,000 is $10 million. Of course, there are other costs, but, be sensible. Don't overspend and make sure you remain independent. I'm not as worried about future sources of money as I am with is Firefox needlessly wasting what it has instead of investing for its own future.

I blame IE on my libray computer... not me -_-;;;

Fritz, good luck finding very competent employees at $100,000. Keep in mind that that's the cost to the employer we're talking about, not the salary. Between taxes (automatic 7% or so right there due to FICA), benefits (health insurance, anyone? 401((k) matching contributions?), the need to provide a work space for the employee (rent, utilities, hardware purchases as needed, etc), a good estimate is that the cost to employer is about double the salary.

So we're talking about people being paid $50,000 or so. In the Bay Area for the most part. Doesn't really compute.

to follow up on what Boris said:

Fritz, Mozilla is paying a lot of attention to this issue. Our spending has been well below our revenue and overwhelmingly in support of employees and infrastructure. This is smart spending and what's not being spent is being put away, a "rainy day fund" in case we find ourselves in a situation where we're "between" revenue streams. Right now, I think it's probably enough to support our current efforts for a couple of years and it's growing.

Money is not being wasted. The financial audit results are out there to help show that to all of the people who care about Mozilla. You can see what Mozilla is earning, is spending, and is saving/investing. The breakdowns are pretty detailed and should give you confidence that resources, whether they be money, equipment, employees, voluntary contributions, etc. are all being put the the best purposes to forward the public-benefit goals of Mozilla.